Code Words Result In NOA Insufficiency

In Bayer Inc. v. Fresenius Kabi Canada Ltd., Justice Brown of the Federal Court granted Bayer’s prohibition application relating to the drug moxifloxacin hydrochloride and Canadian Patent No. 2,192,418. The 418 Patent is listed on the Patent Register against Bayer’s AVELOX I.V. solution.

The 418 Patent claims a monohydrate form of moxifloxacin hydrochloride characterized by certain NMR and XRPD peaks. There was no dispute between the parties that Fresenius’ (formerly PPC) liquid drug product did not contain the claimed polymorph. While Fresenius’ Notice of Allegation alleged that “[t]he solid form of the API used to produce PPC-moxifloxacin is therefore trivial and merely incidental to PPC-moxifloxacin”, its NOA did not disclose that its product would be manufactured, processed and packaged offshore and imported into Canada. Nor did Fresenius’ NOA explicitly refer to the Saccharin Doctrine.  

Bayer alleged that the NOA was defective because it did not address that infringement occurred at an intermediate step of the manufacturing process, such that the claimed crystalline form was produced.

Justice Brown held that the determinative issue was the sufficiency of the NOA. He did not accept Fresenius’ argument that the words “trivial and merely incidental” were code words by which Bayer should have understood that the product was manufactured abroad and imported into Canada, holding:

[49] The words “trivial” and “merely incidental” do appear in patent cases relating to non-infringement by importation. The concepts of trivial and non-essential use appear in the decision of Justice Gauthier, as she then was, in Eli Lilly and Company v Apotex Inc, 2009 FC 991 at paras 327 and 355, where the Court reviews the law of infringement by importation and the Saccharin Doctrine. This decision was subsequently approved by the Federal Court of Appeal in Eli Lilly and Company v Apotex Inc, 2010 FCA 240 at para 19. These words also appear in the decision of Justice Snider in Pfizer-Atorvastatin at paras 77 (“merely incidental”) and 90 (“incidental, non-essential, or could readily be substituted”), as will be discussed later, as they do in the original Saccharin decision itself.

[50] However, in my respectful view, the use of code words in Fresenius’ NOA does not satisfy the statutory duty imposed on Fresenius by the PM (NOC) Regulations to set out a “detailed statement of the legal and factual basis” for its allegations. In my respectful view, these words provide no “detail” at all. They may constitute hints or clues as to the basis(es) which Fresenius might or might not be using to support an allegation of non-infringement. But in my view, giving clues is not enough to satisfy the mandatory and direct regulatory requirement to provide a “detailed statement”.

Nor was the deficiency cured by Fresenius’ subsequent disclosure that its product was manufactured abroad. Following Justice Snider’s decision in Pfizer-atorvastatin, Justice Brown held that while it was permissible to withhold details of the formulation in the NOA, this did not extend to withholding the location of manufacture:

[62] It is my respectful view Justice Snider balanced the competing interests in the need to keep confidential formulation matters confidential, on the one hand, with the second person’s undoubted duty to provide detailed disclosure in the “detailed statement” per the PM (NOC) Regulations. That is why, in my respectful view, Justice Snider limited the second bullet to the new drug’s formulation, i.e., to “certain information regarding its formulation”. Restricting claims of confidentiality to matters of “formulation” is understandable where it relates to truly confidential drug formulation matters. However, I am unable to see how protecting a confidential “formulation” of a new drug allows a party to then claim confidentiality over the fact a drug is manufactured offshore and imported into Canada. If it were so, non-infringement by importation, as an issue in prohibition proceedings, would never be disclosed in a NOA. In my view, that would neither accord with the regulatory duty to provide a “detailed statement”, nor the case law discussed above.

But for the defective NOA, Justice Brown would have dismissed the application, holding that Bayer had not discharged its burden to establish on a balance of probabilities that the claimed monohydrate form appears in the manufacturing of Fresenius’ moxifloxacin, including by importation under the Saccharin Doctrine:

[182] Looking at all the factors, I find that, at best, Bayer could establish (although I found it did not) that the Monohydrate is transiently manufactured at what may be an important stage in the chemical process However, Bayer is unable to establish any of the following: the final product contains any Monohydrate; there is more than one instance at which the Monohydrate is produced; and the manufacturing process, if carried out in Canada, would constitute infringement.

[183] Therefore, in balancing the factors in the test set out above, I find Bayer’s evidence insufficient to establish infringement by importation on a balance of probabilities. Therefore, I am unable to find infringement by importation under the Saccharin Doctrine.

A copy of the Public Judgment and Reasons may be found here.